4
Energy Crises- A Historical Perspective Policy makers have a tendency to act in the field of Energy during extreme crises when serious shortage appears. Soon after 1947 India switched off Power to Lahore. Warsak Dam and few others on Canals in Punjab emerge as a result. Terbela & Mangla were proposed viable & economical when Oil was selling at $3 a barrel. Hydel:Others::80:20 Source: Power Policy 1994 Result of economic growth of eighties due to the US$ Afghan war brought. Huge incentives; electric Results. Tilt away from Hydel. Power Policy 1998Blurred Vision and Approach. Power Policy 2002Enhanced growth due to inflow of US$ as result of U turn under BUSH Doctrine With us or Against us 4 Historical Perspective

5
Not a single unit of power was added in the last regime or why the generation capacity was not increased to keep up with demand Pre 1994 era Shortage of up to 2000MW 1994 Power Policy incentive: Capacity Payment. Government paid the investors 60 percent of the capacity irrespective of use, 6.1 cents/KWh upfront tariff MW surplus with all financial implications. WAPDA went RED. Power, once generated, cannot be stored; it has to be consumed. Attempt to sell to India failed due to 2002 stand-off Growth 7.3%. Power demand3% 6% 9% Break even reached in 2005 instead of projected new power projects totaling 12,141 MW launched from Feb 2004 to June Operation from Oct 2008 to Dec Ghazi Barotha Dam 1450 MW Historical Perspective Energy Crises- A Historical Perspective

12
I ndependent P ower P roducer An IPP is an independently owned company with electricity generating assets (power plants). The company generates power which is purchased by an electric grid operator or a large industrial consumer. R ental P ower P lants An RPP is a moveable structure consisting of Large generators which may be hooked with Distribution or Transmission of national Grid. They produce power anywhere between 50 to 200 MW. 12 Power Production Made easy

14
Power Means Leakage Nationwide 14% Advance. Original 7%. Unprecedented government facility was not made public when the PPIB sought letter of interests. 6% withholding tax deferment. Additional Burden on Import Bill. Pakistan would be forced to pay US $9.6 billion for oil import next year, if oil stays at US $60 per barrel. Pressure on Local Banks to Fund the Project. RPPs generally funded by International financial institutions. In this case only Turkish company is funded internationally. The News-Tuesday, August 11, 2009 FEDERAL Minister for Water and Power Raja Parvez Ashraf has angrily rejected allegations of corruption and kickbacks involving rental power projects in Pakistan and claimed he is prepared to be hanged if any of the allegations are proved. 14

17
Points to Ponder Annual capacity payment for a typical 200 MW RPP = $79 million IPP = $60 million A difference of $19 million a year or Rs1.5 billion a year per RPP. Annual Payments for 1,900 MW of Rental Power Fuel = $2 billion Capacity = $750 million RPPs: A US$ 2.75 Billion question a year Suo Moto ….?????..... Steel Mills……. Annual Fuel payment for a typical 200 MW unit RPP = $211 million IPP = $174 million A difference of $37 million a year or Rs 3 billion a year per RPP. Source: Pepco, Dr. Farrukh Saleem, Director of the Centre for Research and Security Studies 17 Analysis

18
15,900 MW of electricity in December 2009 against a projected peak demand of around 16,064 MW in summer next year without RPPs. Source: Pepco,PPIB websites Power projects completed by the end of 2009 would add 3,500 MW to the national grid, about 2,000 MW more than domestic consumption. Source: Pepco,PPIB websites Hurriedly Conceived 18 Analysis

19
PEPA 1997 Section 12 Initial Environmental Examination and Environmental Impact Assessment (1) No proponent of a project shall commence construction or operation unless he has filed with the Federal Agency an initial environmental examination or, where the project is likely to cause an adverse environmental effect, an environmental impact assessment, and has obtained from the Federal Agency approval in respect thereof. Analysis NO EIA 19

21
Simple Solutions Government may put into operation shutdown IPP plants to obtain 390 MW. Around 500 MW can be plugged into the national grid from captive power plants installed in textile, cement and sugar mills etc. Sugar mills should get soft loans to install high pressure boiler plants for producing 1000 MW. Reduction in line losses and theft by 10-12% may save energy around 1500MW. Current losses 30%. Promotion of use of Energy Savers (CFL) and Light Emitting Diodes (LED) lighting in household. EU has already banned incandescent light bulbs of 60&100Watts from Sep1, 2009 and so has Canada. Recommendations 21

22
Install LED Street lights and Traffic signals (Mean Time Between Failures MTBF 10,000hrs) to save 80% electricity. Make installation of affordable solar water heaters mandatory to free large quantity of gas for generation. 22 Recommendations Simple Solutions

23
Pakistan should go for renewable energy sources: Hydel Power Wind Power Solar Thermal Power Small Hydro Plants Thermal Power Plants using rice husk,waste wood, municipal waste or agriculture residue as fuel. The Long Term Credit Fund administered by the National Bank of Pakistan may be upgraded into an energy and infrastructure bank, possibly on the pattern of Indias Infrastructure Development Finance Company Limited. 23 Recommendations Simple Solutions

24
Conservation Demand side management through conservation of power Acceleration IPPs currently in the finishing stage Reactivation Already installed power generation capacity Accommodation Captive and SPPs into main energy buying orbit To bridge Pakistans electricity supply and demand gap. Nutshell CARA 24 Recommendations

28
28 Thermal Power Plants Sr. No. Power Plants Installed Capacity (MW) Derated/ Dependable Capacity (MW) Current Availability (MW) 1 Thermal Power Station Jamshoro FBC Lakhra Power Station Gas Turbine Power Station Kotri Thermal Power Station Guddu Thermal Power Station Quetta 35220* 6 Thermal Power Station Muzaffargarh Natural Gas Power Station Piranghaib Multan Steam Power Station Faisalabad Gas Trubine Power Station Faisalabad Gas Turbine Power Station Shahdara 55400* TOTAL Note:-WAPDA all steam units are duel fuel based (Gas & Furnace Oil), except Unit No.1 of TPS Jamshoro which is oil based. Whereas Gas Turbines are operated on Gas. * Would be available after March 15, 2008 on Gas restoration. 28